Rehman v. Anjum et al

Filing 48

OPINION AND ORDER granting 42 Motion for partial summary judgment as to liability on Counts I (declaratory judgment) and IV (forgery) of the Counterclaim; DENYING 42 Motion for Partial Summary Judgment as to liability on Count II (breach of fidu ciary duty) of the Counterclaim; and denying in part as to damages. Because claims remain pending in this case, the court withholds entry of final judgment. Response to Count II of the Counterclaim (breach of fiduciary duty) to be filed by 7/29/2013 ; Reply to be filed by 8/12/2013. Defendants are granted until 7/29/2013 to file a third motion for partial summary judgment, limited to the issue of damages, Plaintiff Aziz U Rehman to file Status Report as to Counts VIII and IX due by 7/29/2013. Signed by Senior Judge James T Moody on 7/1/13. (smp)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
SOUTH BEND DIVISION
AZIZ U. REHMAN,
Plaintiff and
Counter-Defendant,
v.
LIAQAT A. ANJUM and
SAMINA IFTIKHAR,
Defendants and
Counter-Claimants.

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No. 3:10 CV 220

OPINION and ORDER
I.

BACKGROUND
As explained in the court’s order on defendants’ first motion for partial summary

judgment, this case arises out of a dispute between plaintiff Aziz U. Rehman
(“plaintiff”), who lives in Niles, Michigan, and his sister and brother-in-law, Samina
Iftikhar and Liaqat A. Anjum (“defendants”), who live in Qatar. In his complaint,
plaintiff contended that defendants entered into an oral agreement with him to file a
lawsuit against a third party, Dr. Shaukat Ali Chaudhry, and then split the proceeds of
that litigation with plaintiff. (Compl., DE # 1 at 2.) Plaintiff further contended that
Anjum signed a document (the “Litigation Agreement,” DE # 37-2 at 3), which
memorialized the parties’ alleged oral agreement to form the partnership. (Compl., DE
# 1 at 2.) Plaintiff claims that he also lent Anjum and/or the partnership $30,000 and
$81,000, but has not been repaid those amounts of money. (Id. at 12.)

Defendants contend that they did not enter into any agreement to form a
partnership with plaintiff, to file suit against Chaudhry, or to split any profits of the
litigation with plaintiff. (Anjum’s Aff. ¶¶ 3, 4, 7, DE # 37-2 at 1; Iftikhar’s Aff. ¶¶ 3, 4, 7,
DE # 37-3 at 1.) Defendants further contend that Anjum never signed the Litigation
Agreement (DE # 37-2 at 1, Anjum’s Aff. ¶ 8), and argue that the signature that appears
on the Agreement was forged.
Rather, defendants contend that they signed limited powers of attorney on
February 23, 2008 (Anjum P.O.A., DE # 42-2 at 5-6; Iftikhar P.O.A., DE # 42-3 at 5-6),
granting plaintiff the power to represent them in a number of matters, including the
lawsuit against Chaudhry. (Anjum Supp. Aff. ¶ 2, DE # 42-2 at 1; Iftikhar Supp. Aff. ¶ 2,
DE # 42-3 at 1.) Defendants further contend that on May 28, 2009, they revoked the
February 23, 2008, powers of attorney and granted plaintiff more limited authority by
executing new powers of attorney. (Anjum & Iftikhar 2d P.O.A., DE # 42-2 at 7-10;
Anjum Supp. Aff. ¶ 5, DE # 42-2 at 1; Iftikhar Supp. Aff. ¶ 5, DE # 42-3 at 1.) Defendants
further contend that, on June 14, 2009, they revoked the May 28, 2009, powers of
attorney because plaintiff had demanded that defendants give him half of the proceeds
of the litigation against Chaudhry. (Anjum Supp. Aff. ¶ 6, DE # 42-2 at 2; Iftikhar Supp.
Aff. ¶ 6, DE # 42-3 at 2.)
Defendants further assert that, despite this revocation, plaintiff purported to
assign their interests in one of their companies to Chaudhry for $40,000 each (or $80,000
total), on June 17, 2009 (Assignment, DE # 42-2 at 12-13), in order to settle the lawsuit

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against Chaudhry. (Anjum Supp. Aff. ¶ 9, DE # 42-2 at 2,; Iftikhar Supp. Aff. ¶ 9, DE
# 42-3 at 2.) Chaudhry apparently accepted the assignment (Acceptances, DE # 42-2 at
14-15), and issued a check to plaintiff for $80,000 (Check, DE # 42-2 at 20). According to
defendants, plaintiff is still in possession of the $80,000. (Anjum Supp. Aff. ¶ 10, DE
# 42-2 at 2; Iftikhar Supp. Aff. ¶ 10, DE # 42-3 at 2.) According to defendants, it was not
until December of 2009 that they learned of the “Litigation Agreement,” which contains
what they claim is the forged signature of Anjum. (Anjum Supp. Aff. ¶ 11, DE # 42-2 at
3; Iftikhar Supp. Aff. ¶ 11, DE # 42-3 at 3.)
On April 30, 2010, plaintiff filed a fourteen-count complaint against defendants
alleging, amongst other things, defendants’ failure to abide by the Litigation Agreement
and repay money owed. (Compl., DE # 1.) Defendants filed a Counterclaim, seeking a
declaration that the Litigation Agreement is invalid (Count I), and alleging breach of
fiduciary duty (Count II), fraud (Count III), and forgery (Count IV). (DE # 6.) On
February 28, 2012, defendants moved for partial summary judgment. (DE # 37.) Plaintiff
did not respond to the motion. The court granted the motion, which disposed of all of
plaintiff’s claims, except the claims of money lent (Count VIII), and money paid (Count
IX), which the motion for partial summary judgment did not address. (DE # 41.)

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Defendants have, again, moved for partial summary judgment, this time on some
of the counts contained in their own Counterclaim. (DE # 43.)1 As was the case with
defendants’ first motion for partial summary judgment, plaintiff did not respond to the
present motion. Defendants have also filed a motion to dismiss plaintiff’s two
remaining claims against them due to lack of prosecution. (DE # 45.) Plaintiff has not
responded to this motion either. Defendants’ motions are addressed in turn below.
II.

ANALYSIS
A.

Defendants’ Motion for Partial Summary Judgment

Defendants have moved for partial summary judgment pursuant to FEDERAL
RULE OF CIVIL PROCEDURE 56. “[S]ummary judgment is appropriate–in fact, is
mandated–where there are no disputed issues of material fact and the movant must
prevail as a matter of law. In other words, the record must reveal that no reasonable
jury could find for the non-moving party.” Dempsey v. Atchison, Topeka, & Santa Fe Ry.
Co., 16 F.3d 832, 836 (7th Cir. 1994) (citations and quotation marks omitted). Where, as
in this case, the movants bear the burden of proof, the movants “must show that the
evidence . . . is ‘so one-sided that . . . [the movants] must prevail as a matter of law’” in
order to obtain summary judgment in their favor. Reserve Supply Corp. v. Owens-Corning
Fiberglass Corp., 971 F.2d 37, 42 (7th Cir. 1992) (quoting Anderson v. Liberty Lobby, Inc.,

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Though plaintiff was initially represented by counsel, he was proceeding pro se
by the time defendants filed their second motion for partial summary judgment.
Accordingly, defendants sent plaintiff the notice of motion for summary judgment that
this district requires be mailed to pro se litigants. (DE # 43.)
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477 U.S. 242, 251-52 (1986)); Addicks Servs., Inc., v. GGP-Bridgeland, LP, 596 F.3d 286, 293
(5th Cir. 2010) (where movant also bears burden of proof, “movant must establish
beyond peradventure” all essential elements in order to warrant judgment in his
favor”).2
Because plaintiff failed to file a response to defendants’ motion for summary
judgment, defendants are entitled to summary ruling on the motion – that is, a ruling
without the benefit of plaintiff’s response. However, plaintiff’s failure to respond does
not automatically result in summary judgment for defendants. Wienco, Inc. v. Katahn
Assoc., Inc., 965 F.2d 565, 568 (7th Cir. 1992). Rather, the court must still “make the
further finding that given the undisputed facts, summary judgment is proper as a
matter of law.” Id. Accordingly, the court’s task will be to examine the factual record in
this case to determine whether defendants have met their burden of demonstrating a
lack of genuine issues of material fact warranting summary judgment in their favor.
1.

Counterclaim Count I: Declaratory Judgment

Defendants seek summary judgment as to Count I of their Counterclaim, in
which they request a declaration that the Litigation Agreement is not valid. A meeting

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Where the movant does not bear the burden of proof at trial, the oft-quoted rule
of Celotex Corp. v. Catrett, 477 U.S. 317 (1986), which involves the shifting of burdens
between the movant and non-movant, applies. In this case, defendants have moved for
summary judgment on their own Counterclaim, on which they bear the burden of
proof, so the only summary judgment standard that is necessary to apply is the one set
forth in Reserve Supply; the burden-shifting standard of Celotex “is inapplicable.” Reserve
Supply, 971 F.2d at 42.
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of the minds is a necessary element of any contract. Zimmerman v. McColley, 826 N.E.2d
71, 77 (Ind. Ct. App. 2005). The only evidence in the record relevant to the Litigation
Agreement is a copy of the purported agreement (Litigation Agreement, DE # 37-2 at 3)
and Anjum’s affidavits, in which he attests that his signature on the document is forged
and that he never entered into any agreements and/or promises with plaintiff in
connection with the Chaudhry litigation. (Anjum Aff. ¶ 8, DE # 37-2 at 1; Anjum Supp.
Aff. ¶ 11, DE # 42-2 at 3.) Plaintiff has provided no arguments nor any evidence
regarding the legitimacy of the signature or the existence of an agreement between
himself and Anjum. Accordingly, summary judgment for defendants is appropriate as
to Count I of their Counterclaim, in the form of a declaratory judgment that the
purported “Litigation Agreement” is not a valid contract.
2.

Counterclaim Count II: Breach of Fiduciary Duty

Defendants seek summary judgment as to Count II of their Counterclaim, which
alleges that plaintiff breached his fiduciary duties to defendants as their attorney-infact. In this case, defendants claim that plaintiff breached his fiduciary duties to them
by: (1) negotiating a settlement of Anjum and Iftikhar’s interest in the litigation with
Chaudhry without their knowledge after his grant of authority had been revoked; (2)
assigning their interests in a company to Chaudhry in furtherance of this purported
settlement; (3) disposing of these interests for a fraction of their acknowledged value; (4)
attempting to retain the proceeds from the assignment; and (5) proffering a bogus

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Litigation Agreement to support the existence of certain alleged promises between the
parties.
The creation of a power of attorney creates a fiduciary relationship between the
parties. Villanella v. Godbey, 632 N.E.2d 786, 790 (Ind. Ct. App. 1994). However, when a
power of attorney is revoked, the fiduciary relationship between the parties ceases to
exist. Meyer v. Wright, 854 N.E.2d 57, 61 n.2 (Ind. Ct. App. 2006). In this case, defendants
argue that they revoked the May 28, 2009, power of attorney on June 14, 2009, before all
of the purported fiduciary breaches occurred. Accordingly, defendants’ own argument
does not support their claim that a fiduciary relationship was in place at the time of the
alleged breaches, and summary judgment is not appropriate as to Count II of
defendants’ Counterclaim.
3.

Counterclaim Count IV: Forgery

Defendants also seek summary judgment as to Count IV of their Counterclaim,
which alleges that plaintiff engaged in forgery. The Indiana criminal code provides that
“[a] person who, with intent to defraud, makes, utters, or possesses a written
instrument in such a manner that it purports to have been made . . . by another person
. . . commits forgery, a Class C felony.” IND. CODE § 35-43-5-2(b). The Indiana Crime
Victims Act allows victims of certain crimes, such as forgery, to recover in a civil action
the pecuniary loss suffered as a result of the crime. IND. CODE § 34-24-3-1. Notably, “a
criminal conviction is not a condition precedent to recovery.” White v. Ind. Realty Assocs.
II, 555 N.E.2d 454, 456 (Ind. 1990).

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Anjum has attested via affidavits that his signature on the purported Litigation
Agreement is not his, and that he never entered into any agreements with plaintiff in
connection with the Litigation. (Anjum Aff. ¶ 8, DE # 37-2 at 1; Anjum’s Supp. Aff. ¶ 11,
DE # 42-2 at 3.) Plaintiff has not contested these attestations in any way or offered any
evidence on this point. Accordingly, summary judgment for defendants is appropriate
on their claim for forgery.
4.

Damages on Counterclaim

In their memorandum in support of the present motion, defendants make a halfhearted attempt to prove the damages to which they claim they are entitled with regard
to their forgery claim.3 Defendants blanketly claim that they are entitled to $24,114, for
fees and costs paid to their current counsel “to address the forgery,” and $20,000 for
travel-related expenses to and from Pakistan. (DE # 44 at 9.) Defendants further claim
that the sum of these two amounts should be trebled pursuant to IND. CODE § 34-24-31(1). Finally, defendants request $63,222 for fees and costs paid to their current counsel
“in connection with the forged Litigation Agreement” pursuant to IND. CODE § 34-24-31(2 & 3). (DE # 44 at 9.)
There are numerous problems with defendants’ attempt to prove damages. First,
attorneys’ fees are not generally recoverable as compensatory damages under Indiana

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Defendants actually seek damages for both their forgery claim (Count IV) and
their breach of fiduciary duty claim (Count II). Since the court only granted summary
judgment herein on the forgery claim, its comments on damages are confined
accordingly. The court notes, however, that the same issues plague defendants’ requests
for damages related to both claims.
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law; a rare exception to this rule is the “third party litigation exception,” which permits
the recovery of attorneys’ fees when an opponent’s wrongdoing caused a claimant to
become involved in litigation with a third party. Kinsel v. Schoen, 934 N.E.2d 133, 141 (Ind.
Ct. App. 2010). Defendants argue that they paid in excess of $24,000 in attorneys’ fees
and costs “to address the forgery,” but it is unclear what legal disputes these fees
related to and whether they involved third parties. If the fees were paid for advice
regarding litigation (or potential litigation) involving plaintiff, the fees are unrecoverable
as compensatory damages. Itemized statements regarding what work was actually
done by attorneys regarding specific legal matters is necessary to determine whether
the claimed $24,114 is recoverable.
Second, defendants can only recover for damages proximately caused by
plaintiff’s wrongdoing. IND. CODE § 34-24-3-1 (allowing damages for any person who
“suffers a pecuniary loss as a result of a violation”) (emphasis added); Obremski v.
Henderson, 497 N.E.2d 909, 910-11 (Ind. 1986) (requiring proximate cause for Crime
Victims Act violation, then codified at IND. CODE § 34-4-30-1). However, defendants fail
to adequately explain how any of the claimed compensatory damages were proximately
caused by plaintiff’s act of forgery. Specifically, defendants do not provide sufficient
proof regarding how plaintiff’s forgery caused them to incur $20,000 in nondescript
“travel-related expenses,” nor do they attempt to prove why the forgery caused them to
expend over $24,000 in payments to attorneys.

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Third, defendants only supplied their own personal affidavits in support of their
claimed damages. To prove the amount of damages, conclusory allegations in an
affidavit are generally insufficient. See e360 Insight v. The Spamhaus Project, 500 F.3d 594,
603 (7th Cir. 2007). Without proper documentation such as a receipt or, in the case of the
claimed attorneys’ fees, an itemized bill, the court will not grant defendants’ request for
tens of thousands of dollars in purported damages.
Fourth, it is unclear whether defendants are entitled to the $63,222 they claim
they paid in attorneys’ fees “in connection with the forged Litigation Agreement.” (DE
# 44 at 9.) Generally, Indiana follows the “American Rule,” which requires each party to
pay his or her own attorneys’ fees. Delgado v. Boyles, 922 N.E.2d 1267, 1270 (Ind. Ct.
App. 2010). The Indiana Crime Victims Act has created a statutory exception to this
general rule, permitting recovery of reasonable attorneys’ fees associated with civil
actions related to crimes such as forgery. IND. CODE § 34-24-3-1. However, defendants
have failed to demonstrate how defendants’ request for $63,222 paid to attorneys “in
connection with the forged Litigation Agreement” is different from the $24,114 paid to
attorneys “to address the forgery,” which defendants seek as compensatory damages.
Further, while defendants suggest that $63,222 was paid to attorneys “following the
inception of the action on April 30, 2010,” it was plaintiff’s complaint that was filed on
April 30, 2010, not defendants’ counterclaim for forgery, which was not filed until June 23,
2010. This distinction is important, as only the forgery counterclaim is relevant to the
determination of attorneys’ fees under IND. CODE § 34-24-3-1. Without an itemized

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statement regarding what work was done by attorneys with regard to which claims, it is
not possible to determine whether the claimed fees actually paid for attorney work
product related to the forgery claim, as opposed to the prosecution or defense of some
other claim, nor is it possible to determine whether the claimed fees are reasonable. For
these reasons, defendants’ motion for summary judgment is denied as to damages.
B.

Defendants’ Motion to Dismiss for Failure to Prosecute

Only two of plaintiff’s claims remain in this case: the claims for “money lent” and
“money paid” (Counts VIII and IX). Defendants have now moved to dismiss these
claims for lack of prosecution, citing plaintiff’s failure to take any action in these
proceedings since October of 2011. (DE # 45.) As the court has already explained,
plaintiff failed to respond to this motion.
Though plaintiff has not responded to either of defendants’ motions for partial
summary judgment, nor defendants’ motion to dismiss for lack of prosecution, he was
not necessarily required to, and the court cannot necessarily dismiss his claims solely
due to his inaction in this regard. See Moore v. Hallisy, No. 98-2211, 1999 WL 560619, at
*2 (7th Cir. July 28, 1999) (unpublished) (district court erred in dismissing plaintiff’s case
for failure to prosecute due to plaintiff’s failure to respond to motion for summary
judgment).
However, the fact that plaintiff has not responded to three of defendants’
motions and has not taken any action at all in this case in over a-year-and-a-half does
make the court wonder whether plaintiff has abandoned this litigation. If so, his claims

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should be dismissed under RULE 41(b). Washington v. Walker, 734 F.2d 1237, 1238 (7th
Cir. 1984) (“‘[F]ailure to prosecute’ under [RULE 41(b)] does not mean that the plaintiff
must have taken any positive steps to delay the trial or prevent it from being reached by
the regular machinery of the court. It is quite sufficient if he does nothing, knowing that
until something is done there will be no trial.”).
But before the court may dismiss plaintiff’s claims for lack of prosecution, it must
provide plaintiff with due warning. Ball v. City of Chi., 2 F.3d 752, 755 (7th Cir. 1993).
“‘Due warning’ need not be repeated warnings and need not be formalized in a rule to
show cause. . . . But there should be an explicit warning in every case.” Id. Accordingly,
the court now orders plaintiff to file by July 26, 2013, a status report regarding whether
he intends to pursue Counts VIII and IX of his complaint. Failure to file such a report
will be construed as abandonment of these claims, and plaintiff’s cause of action will be
dismissed, with prejudice, for failure to prosecute.
III.

CONCLUSION
This litigation has been pending for over three years, with numerous stops and

starts. Plaintiff has virtually disappeared from this litigation, and defendants have
litigated this case in a slow, piecemeal fashion. For these reasons, and to prevent further
delay, the court orders the following:
(1) Defendants’ motion for partial summary judgment (DE # 42) is GRANTED as
to liability on Counts I (declaratory judgment) and IV (forgery) of the Counterclaim,;
DENIED as to liability on Count II (breach of fiduciary duty) of the Counterclaim; and
DENIED as to damages. Because claims remain pending in this case, the court
withholds entry of final judgment.

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(2) In light of the court’s analysis of Count II of the Counterclaim (breach of
fiduciary duty), supra pp. 6-7, the court now moves, sua sponte, for summary judgment
on this claim. Defendants are hereby ORDERED to file a response by July 29, 2013,
setting forth the reasons why summary judgment on this claim should not be granted
for plaintiff. Should plaintiff wish to file a reply to defendants’ response, he must do so
by August 12, 2013. (Alternatively, if defendants choose to voluntarily dismiss this
claim pursuant to FEDERAL RULE OF CIVIL PROCEDURE 41(a), the deadlines in this
paragraph will be vacated.)
(3) In a footnote in their memorandum supporting their most recent motion for
partial summary judgment, defendants expressed an interest in dismissing, without
prejudice, Count III of their Counterclaim, which alleges fraud. (DE # 44 at 10 n.2.)
However, no formal motion has been made, so the court is unable to take action with
regard to this claim. The court requests that, by July 29, 2013, defendants advise the
court as to whether they intend to seek voluntary dismissal of the claim.
(4) With respect to defendants’ claims, the issue of damages remains. Defendants
are GRANTED until July 29, 2013, to file a third motion for partial summary judgment,
limited to the issue of damages.
(5) The court ORDERS plaintiff Aziz U. Rehman to file, by July 29, 2013, a
status report regarding whether he intends to pursue Counts VIII and IX of his
complaint. In light of plaintiff’s failure to participate meaningfully in this litigation for
over 18 months, failure to file such a report will be construed as abandonment of these
claims, and plaintiff’s cause of action will be dismissed, with prejudice, for failure to
prosecute.
SO ORDERED.
Date: July 1, 2013
s/James T. Moody________________
JUDGE JAMES T. MOODY
UNITED STATES DISTRICT COURT

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